Politics Before Common Sense

Tonight's Panorama "Tax, Lies and Videotape", to be shown on BBC One at 20:30 BST, will be gemusing.

It shows David Heaton, who was secretly filmed at a London conference "101 Ideas for Personal Tax Planning" a few months ago, offering tips on how to keep money "out of the chancellor's grubby mitts".

Nothing wrong with that at all, except that in today's febrile atmosphere (whipped up by sound bite politicians and the media) over tax avoidance Mr Heaton then made an unfortunate career move. Two months after the conference he then joined an HMRC panel advising HMRC and the courts about artificial and aggressive tax avoidance.

In past days such a move would not cause the bat of an eyelid. However, the political atmosphere is different and as such Mr Heaton has resigned from his HMRC role.

The BBC reports that Mr Heaton was caught on camera describing a maternity scheme he called the Bump Plan.

"Ninety per cent of what you pay out ends up with the employee. You can't really knock that one."

By deliberately timing bonuses to enable an increased rebate on maternity pay, the tax paid on the bonus would effectively fall from 41.8% to just 8.4%, he explained.

HMRC have stated that it would regard such a scheme as "an abuse" and would challenge anyone using it.

David Gauke said:

"Mr Heaton's statements are directly at odds with the government's approach to tackling tax avoidance, therefore it is right that Mr Heaton resigns from his position."

Margaret Hodge said she was "shocked" by Mr Heaton's comments.

"This is an absolutely classic example of where government passes a law with a particular intent and the tax advisers then abuse that and use it for a purpose that was never intended by government."

It seems to me that if HMRC wants to keep up with the real world, it should welcome people such as Mr Heaton with open arms. Unfortunately politics has come before common sense.

Tax does have to be taxing.

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